In Re: Wells Fargo Wage and Hour Employment Practices Litigation

Case Updates

NCLC urged the U.S. Court of Appeals for the Fifth Circuit to issue a writ of mandamus overturning the district court's order “conditionally” certifying a “collective action” brought under the Fair Labor Standards Act (FLSA), effectively creating an end-run around the U.S. Supreme Court's decision in Wal-Mart v. Dukes. The appeal arises out of a pair of consolidated FLSA wage-and-hour collective actions brought by mortgage officers. Under the test applied by the district court, plaintiffs can obtain “conditional” certification so long as they satisfy a “light burden,” based on “limited” discovery, on the question whether putative class members are “similarly situated.”

According to NCLC's amicus brief, this approach flies in the face of the requirements of Rule 23 of the Federal Rules of Civil Procedure (the rule for certifying class actions), and is inconsistent with the Supreme Court's decision in Wal-Mart v. Dukes clarifying that courts must conduct a “rigorous analysis” before certifying a class. NCLC disputed the plaintiffs' theory that Wal-Mart v. Dukes does not apply to FLSA “collective actions,” arguing instead that Rule 23 governs the procedure in all civil suits unless Congress clearly exempts them - and Congress has never exempted FLSA actions from Rule 23. NCLC warned that the district court's lax approach to certifying FLSA collective actions, if left to stand, will make it easier for plaintiffs to certify even the most frivolous FLSA class actions.

Moreover, NCLC argued that the district court's novel “conditional certification” procedure - which allows a class or collective action to be “conditionally certified” long enough to at least compel expensive and time-consuming discovery, mounting the already exorbitant settlement pressures - is a “Frankenstein's monster,” combining many of the drawbacks of class actions without any of the benefits. It permits plaintiffs to impose massive costs and settlement pressure on defendants until shortly before trial. Should the class ultimately be decertified, the resources expended in the interim will never be recovered by the parties or the court. This judicial creation also threatens to eviscerate time-tested procedural protections for employers and employees alike.